LO 1, 3, 4
(Learning Objectives 1, 3, 4: Measure a plant asset’s cost; calculate UOP depreciation; analyze the effect of a used asset trade-in) Concord Truck Company is a large trucking company. The company uses the
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- Promise Trucking Corporation uses the units-of-production depreciation method because units-of-production best measures wear and tear on the trucks. Consider these facts about one Mack truck in the company's fleet. data facts: When acquired in 2015, the rig cost $370,000and was expected to remain in service for 10 years or 1,000,000 miles. Estimated residual value was $140,000. The truck was driven 85,000 miles in 2015, 125,000miles in 2016, and 165,000 miles in 2017.After 40,000 miles, on March 15, 2018, the company traded in the Mack truck for a less expensive Freightliner. Promise also paid cash of $28,000.Fair market value of the Mack truck was equal to its net book value on the date of the trade. Requirements: 1. Record the journal entry for depreciation expense in 2018. 2. Determine Promise's cost of the new truck. 3. Record the journal entry for the exchange of assets on MarchMarch 15, 2018. Assume the exchange had commercial substance.arrow_forwardCengageNOwv2 | Online teaching and.. A AAMA - State Scope of Practice L Learning Module 1- ACCT1105: Financi. nt. C https://geyser.cl-cms.com/assets/fr5am.. eBook Show Me How Units-of-Activity Depreciation A truck acquired at a cost of $202,800 has an estimated residual value of $18,000, has an estimated useful life of 440,000 miles, and was driven 113,000 miles during the year. Determine the following. If required, round your answer for the depreciation rate to 2 decimal places. a. The depreciable cost b. The depreciation rate per mile c. The units-of-activity depreciation for the year Check My Work Previous Next All work saved. Save and Exit Submit Assignment for Grading étv MacBook Air 80 888 DII DD F4 F6 F7 F9 F10 F11 F12 %23 2$ & 3 4 5 7 8 - E T Y U { G J %3D K V M .... V INarrow_forwardThe translation may be awkward. Please tell me the detailed explanation and answer.Please tell me how the answer process comes out. 1. Double-declining-balance methodOn January 1, 2018, Company A purchased one mechanical device. The acquisition cost of machinery is 800,000, and the content training is 8 years. The double-declining-balance method is applied separately when the residual value of the machine is 300,000 and 100,000, and the depreciation cost of the machine in 2020, 2021 and 2022 is calculated and depreciated. If there is a difference, please explain why. (Round to the nearest whole number when calculating depreciation.) 2, depreciation / sum-of-the-years'-digits methodOn October 1, Company A paid 1,600,000,000 cash and purchased the building. It is estimated that this building can be used for 5 years. The estimated residual value of the building is 100,000,000. If you use the sum-of-the-years'-digits method, calculate the depreciation of the building on your statement of…arrow_forward
- Maybe a guide for this one. 9. XYZ Co. purchased a truck on January 1, 2016, for $48,000. The company decided to depreciate the truck over a five-year period using the straight-line method. The company estimated its residual value at $3,000. Show how the costs should be presented on the balance sheet and income statement for the full year ended June 30, 2018. Label the statements properly.arrow_forwardUsing Excel to Calculate Double-Diminishing-Balance Depreciation PROBLEM Audio Systems purchased a delivery truck on January 1, 2024. The company has a December 31 year end. Additional information concerning the truck follows. Purchase price of truck Student Work Area Required: Provide input into cells shaded in yellow in this template. Use mathematical formulas with cell references to the Problem and work area as indicated. Using the diminishing-balance method and assuming the depreciation rate is equal to double the straight-line rate, calculate the depreciation: Residual value Useful life $80,000 8,000 4 years a. For each year of the truck's life Rate January 1 Carrying Amount Depreciation December 31 Carrying Rate Expense Amount 2021 0% b. 2022 2023 2024 0% 0% 0% In total over the truck's life Totalarrow_forward(Learning Objectives 1, 2, 3: Measure and account for plant assets; distinguish acapital expenditure from an expense; measure and record depreciation) Becker Supply, Inc.,opened an office in White Bear Lake, Minnesota. Becker incurred the following costs in acquiring land, making land improvements, and constructing and furnishing the new sales building:LO 1, 2, 3a. Purchase price of land, including an old building that will be usedfor a garage (land market value is $310,000; building marketvalue is $90,000)..................................................................................... $340,000b. Grading (leveling) land............................................................................ 8,800c. Fence around the land............................................................................. 31,400d. Attorney fee for title search on the land .................................................. 1,100e. Delinquent real estate taxes on the land to be paid by Becker Supply......…arrow_forward
- CengageNOWv2 | Online teaching and learning resource from Cengage Learning Calculator Sale of Equipment Equipment was acquired at the beginning of the year at a cost of $612,500. The equipment was depreciated using the straight-line method based on an estimated useful life of 9 years and an estimated residual value of $44,360. a. What was the depreciation for the first year? Round your answer to the nearest cent. b. Using the rounded amount from Part a in your computation, determine the gain(loss) on the sale of the equipment, assuming it was sold at the end of year eight for $102,987. Round your answer to the nearest cent and enter as a positive amount. c. Journalize the entry to record the sale. If an amount box does not require an entry, leave it blank. Round your answers to the nearest cent. Previous Next> Email Instructor Submit Test for Grading All work saved.arrow_forwardPlease see below. I need help with this problem. In recent years, Crane Company has purchased three machines. Because of frequent employee turnover in the accounting department, a different accountant was in charge of selecting the depreciation method for each machine, and various methods have been used. Information concerning the machines is summarized in the table below. Machine Acquired Cost SalvageValue Useful Life(in years) DepreciationMethod 1 Jan. 1, 2015 $121,500 $11,500 10 Straight-line 2 July 1, 2016 71,000 12,000 5 Declining-balance 3 Nov. 1, 2016 68,100 8,100 6 Units-of-activity For the declining-balance method, Crane Company uses the double-declining rate. For the units-of-activity method, total machine hours are expected to be 30,000. Actual hours of use in the first 3 years were: 2016, 710; 2017, 5,900; and 2018, 7,300. Compute the amount of accumulated depreciation on each machine at…arrow_forwardManny Company uses many kinds of machines in its operations. The following information relates to a machine that was acquired at the beginning of the current year: Cash paid for machine, including VAT of P96,000 Cost of transporting machine Labor cost of installation by expert fitter Labor cost of testing machine Insurance cost for the current year Cost of training for personnel who will use the machine Cost of safety rails and platform surrounding machine Cost of water device to keep machine cool Cost of adjustment to machine to make it operate more efficiently Estimated dismantling cost to be incurred as required by contract 896,000 30,000 50,000 40,000 15,000 25,000 60,000 80,000 75,000 65,000 What total amount should be capitalized as cost of the machine?arrow_forward
- “Three Junes Weaving has just purchased an automated weaving machine and is trying to figure out which depreciation method to use: straight-line, units-of-production, or double-declining-balance. Ira Glasier, the controller, is interested in using a depreciation method that approximates the usage of the weaving machine. He also expects that the weaving machine will have increasing repairs and maintenance as the asset ages.” Which depreciation method should Ira choose?arrow_forwardIn recent years, Larkspur Company has purchased three machines. Because of frequent employee turnover in the accounting department, a different accountant was in charge of selecting the depreciation method for each machine, and various methods have been used. Information concerning the machines is summarized in the table below. Machine Acquired Cost Salvage Value Useful Life (years) Depreciation Method 1 1/1/2020 $ 99,800 $ 13,000 8 Straight-line 2 7/1/2021 92,000 11,000 5 Declining-balance 3 11/1/2021 104,000 8,000 6 Units-of-activity For the declining-balance method, Larkspur Company uses the double-declining rate. For the units-of-activity method, total machine hours are expected to be 32,000. Actual hours of use in the first 3 years were 2021, 600; 2022, 4,700; and 2023, 6,700. For Bus #3, calculate depreciable cost per mile under units-of-activity method.arrow_forwardilrn/takeAssighmer P MyLab & Masterin... https://sullivan.bla... 目Rea Gmail Mail - Newcomb,... Sullivan Blackboard Learn >> W Microsoft Office H... Revision of Depreciation A truck with a cost of $123,000 has an estimated residual value of $24,000, has an estimated useful life of 12 years, and is depreciated by the straight-line method. a. Determine the amount of the annual depreciation. $ 121,000 b. Determine the book value at the end of the seventh year of use. 2$ C. Assuming that at the start of the eighth year the remaining life is estimated to be six years and the residual value is estimated to be $15,000, determine the depreciation expense for each of the remaining five years. %24 Previousarrow_forward
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